No 'slam dunk': WPP, Interpublic follow the leader

Financial results from the world's largest holding company suggest an unsteady industry could be on the mend. But even though there are signs of hope for its biggest rivals, both of which report over the next three weeks, it's no slam dunk.

Omnicom Group in recent years has outperformed the market in good times and bad. It followed suit last week, reporting profit and revenue increases for the fourth quarter as well as for all of 2003. No. 2 Interpublic Group of Cos. reports March 9, and third ranked WPP Group reports Feb. 27. Even though analysts look for an improved showing, they don't expect WPP or Interpublic to perform at the level of Omnicom.

"Omnicom remains the clear leader of a strong industry that is characterized by healthy growth, geographic breadth and significant segment diversification," said William Blair & Co. analyst Troy Mastin in a report to investors.

full swing

Mr. Mastin said a recovery in the U.S. marketing industry appears to be in full swing with marketing services sectors improving as well. He said international markets are looking up too. And that can only help WPP Group and Interpublic. Investors are looking to see how well Interpublic has fared following a year in which it worked through organizational and financial issues under new Chairman-CEO David Bell, whose first anniversary at the helm is Feb. 27.

Analysts remain cautious about Interpublic. Ten analysts surveyed by Zacks Investment Research estimated its fourth-quarter earning per share would be 16¢, though estimates varied from 5¢ to 28¢. Estimates for WPP were more consistent, with an average of $1.18 per share and a band of $1.09 to $1.26 for the second half of 2003.

Paris-based Publicis Groupe reported a 5.2% increase in fourth quarter revenue and a 2% increase for the year, while cross-town rival Havas was down 3.8% in the fourth quarter and 5.7% for the year. Publicis is the world's No. 4 ad group, followed by Japan's Dentsu, then Havas at No. 6.